SINGAPORE: Embattled water treatment company Hyflux and its potential white knight Utico are "progressing" towards a binding investment deal that will see the United Arab Emirates utility firm invest S$400 million for an 88 per cent stake in the Singapore firm, the companies said in a joint news release on Thursday (Jul 11).
Utico, one of seven potential investors, had previously extended the deadline for entering into a binding agreement with Hyflux to Jun 27.
In an update on Thursday, the companies said that they had held "informal discussions" after the Jun 27 deadline and are heading towards a deal, subject to approvals from all stakeholders and definitive documents being finalised and signed.
The deal will see Utico take an 88 per cent equity stake in Hyflux for S$300 million as equity and S$100 million as a shareholder loan.
Utico also intends to offer the cash equivalent of a 4 per cent stake in the enlarged Utico group plus additional cash to the holders of preference shares and perpetual capital securities.
The companies said they have been actively engaged in talks over the past few weeks and met with representatives of various stakeholder groups on Tuesday and Wednesday to discuss the deal.
"The parties are cognisant of time being of the essence to preserve value," they said.
"The intention is for the parties to enter into definitive documentation in respect of the proposed investment as soon as possible, and to hold town hall meetings in the coming weeks for the holders of perpetual securities and preference shares and the holders of medium term notes ideally before the next court hearing."
READ: From making waves to drowning in red ink: Hyflux, Tuaspring and how a business giant came undone
Hyflux, whose year-long restructuring journey remains closely watched by tens of thousands of retail investors, said last month that it had had talks with seven suitors since it fell out with former white knight SM Investments in April.